man talking to customers

How to Use Customer Feedback to Improve Your Small Business

Ezra Cabrera | August 9, 2023


    You’ve probably heard the old saying, “You can’t meet your customer’s needs until you know what those needs are.” And figuring out what the customer wants is often a leading source of stress for small business owners. But in reality, finding out what your customer needs is often as simple as asking them.

    If you’re a small business, customer feedback is one of the most valuable resources at your disposal — and it’s free. It can provide you with early validation of your ideas, help with suggestions on course corrections, build trust with new customers, and help you retain the customers you’ve already got. Let’s touch on some of the best ways to harvest customer feedback, and what to do with it once you’ve got it. 

    Let Customers Define Your Course

    Research and development is one of the most important — and difficult — parts of evolving your business. But if you want to know where to take your product, all you have to do is ask the customer. Most of them will be happy to tell you.

    Utilizing customer feedback is something you want to do at every stage of product development, not just after your finished product has been shipped, and is out in the field. Solicit feedback from your target market early on in the process, to make sure your bright idea will succeed in the marketplace. There’s no greater validation for an idea than glowing feedback from the people who, down the road, will make or break you. 

    Don’t restrict customer feedback to your own product. Once you’ve identified your main competitors, ask your potential customers what they like and don’t like about the competition. If you’re opening a movie theater, ask your customers what annoys them about the local multiplex. If you’re starting a long-distance moving company, ask your customers about the other leading long-distance moving companies in the area. This kind of intelligence gathering on the front end can save you a lot of grief down the line.

    Get Your Product Out There

    Once you’ve defined your product, your focus should be to get it out the door as fast as possible. The sooner you get your product into the hands of customers, the sooner you can start harvesting their feedback to make it better and easier to use.

    Doing this right will require two things: first, you’ll need a way to gather this customer feedback, which we’ll touch on in the next item. Second, you’ll need effective management to coordinate your customer service, marketing, and engineering teams. As customer feedback starts to roll in, you want to make sure it gets where it needs to go, and that it’s quickly acted upon. All the customer feedback in the world isn’t going to be useful if it just sits in an unchecked inbox.

    Know How to Gather Your Feedback

    There are so many ways to gather feedback from your customers. Email surveys, website pop-up surveys, feedback forms, in-app feedback, live chat, active monitoring of social media, and proactive phone or in-person interviews are just a few. You can even make your own online quizzes to solicit feedback.

    Keep in mind that there are three main types of feedback. Requested feedback is when you proactively ask for customer input, perhaps in an email or pop-up survey. Given feedback is when the customer comes to you proactively, perhaps through social media or your website, and offers feedback. Then there’s observed feedback, which is usually gathered by monitoring social media or other platforms where the customer is organically talking about your product. 

    Ideally, you want to receive all three types of feedback. Give your customers multiple channels to communicate with you, and make sure those channels are actively monitored. Reach out to established customers to make sure they’re satisfied; much like employees who silently check out before quitting, customers can be quietly disgruntled for some time before discontinuing. Keep them on board by keeping them in the loop, and keeping them happy.

    Many experts also suggest going to where your customers are and soliciting feedback from them there — which leads to the next item.

    Supercharge Feedback Harvesting by Finding Relevant Communities

    While some customers will certainly offer feedback without much prompting, you can gather much more information by actively approaching your customers. That means visiting them on social media platforms like Twitter, Facebook, Reddit, or Discord. You can also host online events like Twitter Spaces or webinars to bring your customer base together and talk to them in real-time. 

    Listen and Pivot

    A product’s path to success is rarely a straight line. There are usually twists and turns, ups and downs, adjustments, and course corrections. When something isn’t working, you may need to pivot in a different direction, and customer feedback can provide you with a compass

    If your product isn’t gaining the traction you expect, one of your first moves should be to go to your customers and find out how they think you should improve your product. For example, if you’re selling an Excel course, ask users what’s missing from the course, or how the course could better prepare them for real-world application. More than likely, they’ll have some very specific complaints and suggestions, and there will probably be a rough consensus. 

    Hold Onto the Customers You Have 

    Small businesses sometimes put so much emphasis on expansion that they overlook customer retention. But holding onto a customer you already have is just as important as finding a new customer. 

    When a customer moves to cancel or unsubscribe, it’s often because they either don’t feel like they’re getting good value or because they don’t feel heard. Giving them an opportunity for an “exit interview” is an easy way to either change their mind (for example, by offering last-minute gifts or discounts) or to gather some honest, high-value feedback as they head out the door. 

    Visibility and Reviews Help Create Trust

    Customers trust other customers more than anyone else. So when you receive positive feedback, share it with your prospective customers by posting testimonials on your website.

    Reviews are another form of extremely effective customer-to-customer feedback. The last time you thought about buying something, the first thing you did was probably read some online reviews, and your customers are no different. Encourage or incentivize your customers to leave online reviews for your business. 

    Responding to Feedback Shows You’re Listening and Authentic

    When you do receive feedback, respond to it. Maybe this means replying to a critical tweet, or simply thanking a reviewer for a five-star review. Acknowledging a criticism or compliment shows customers that you’re listening to them, that you take their opinion seriously, and that, if they do run into problems, they’ll be able to reach a sympathetic ear. 

    The Bottom Line

    Customer feedback is a key to success in business. By simply asking customers what they want and delivering it, you can effectively utilize their valuable insights. Whether you're testing prototypes, adapting on the fly, or improving customer retention, gathering real customer feedback is the most powerful resource at your disposal.

    About the Author

    Ezra Neiel Cabrera has a bachelor’s degree in Business Administration with a major in Entrepreneurial Marketing. Over the last 3 years, she has been writing business-centric articles to help small business owners grow and expand. Ezra mainly writes for SMB Compass, but you can find some of her work in All Business, Small Biz Daily, LaunchHouse, Marketing2Business, and Clutch, among others. When she’s not writing, you’ll find her in bed eating cookies and binge-watching Netflix.